Sustainability reporting by private sector should be made obligatory: Stakeholders 

Sustainability reporting by private sector companies should be gradually made mandatory in Bangladesh as the country has one of the lowest rates of such reporting among publicly-listed companies in South Asia, said stakeholders at a dialogue.

According to the Global Reporting Initiative (GRI), Only 49 out of 320 companies (15%) listed on the Dhaka Stock Exchange (DSE) submitted sustainability reports in 2019. However, only 11 of the reports (3%) followed the GRI reporting framework.

The information was revealed in a national policy dialogue on "Sustainability Reporting by the Private Sector in Bangladesh: Expectations and Experience" organised by the Citizen's Platform for SDGs, Bangladesh at the Brac Centre Inn in the capital on Saturday. 

At the dialogue, stakeholders said a lack of awareness, dearth of capacity, absence of the culture, weak corporate governance, unavailability of stronger regulatory guidance, and vague incentives for the private sector are the major challenges behind the poor sustainability reporting in Bangladesh.

India (Bombay Stock Exchange) has one of the highest reporting rates, with 498 publicly listed organisations out of 503 (99%) producing sustainability reports in 2019. However, only 74 met the GRI reporting standards (15%).

In Sri Lanka (Colombo Stock Exchange), 130 organisations produced sustainability reports out of 284 companies (46%), 83 of which were compatible with the GRI framework (29%).

DSE and GRI organised several technical workshops to promote GRI-based sustainability reporting in Bangladesh in 2021. Now, GRI's sustainable development database lists 58 reports in DSE.

Dr Debapriya Bhattacharya, convenor of Citizen's Platform for SDGs, Bangladesh, said, "This is a new issue in Bangladesh. The representatives of various sectors, including the corporate sector, who have come here today asked for a step-by-step and controlled progress towards ensuring sustainable reporting. No one agreed to do something abruptly without preparation."

"In the context of sustainable development goal (SDG) implementation, sustainability reporting has emerged as an important tool for guiding us towards that goal of new competitiveness in the new middle-income country category," he said.

Sustainability Reporting is a standard, either voluntary or sometimes mandatory, a business practice which publicly discloses a company or organisation's economic, social, environmental and governance practices to internal as well as external stakeholders.

Environmental, social, and governance (ESG) metrics are often used to analyse an organisation's ethical impact and sustainability practices. 

GRI is the international, non-profit organisation that provides the world's most widely used sustainability reporting standards since 1997.

Towfiqul Islam Khan, the keynote presenter and also the senior research fellow at the Centre for Policy Dialogue (CPD), mentioned that out of non-financial industries, the cement industry is the best performing, with the highest disclosures made. It is followed by the Pharmaceuticals, Engineering, Fuel and electricity and Telecommunications industries.

The least disclosures were made by the Tannery industry, followed by Textiles and Paper and printing, he said, adding that highly polluting industries like these were also among the lowest in making environmental sustainability disclosures.

The policy experts said that during the upcoming LDC transition, environmental compliance and labour rights are two issues that will figure prominently for Bangladesh's overseas market access. Sustainability reporting will be crucial to this end.

They raised the need to have an institutional framework to promote and guide this practice for the sake of stronger and sustainable private sector growth.

Saber Hossain Chowdhury, chairman of the Parliamentary Standing Committee on the Ministry of Environment, Forest and Climate Change, said, "We should talk about the importance of sustainability reporting and how it can benefit the private sector. To this end, there are three motivations for the private sector: cost reduction, profitability, and increased income. The process should start from the micro-level industry, and that is the key."

"'Sustainability' can be the theme of the next budget if private sectors can influence the government with their recommendation. Consumers should also be included in the process of promoting and implementing sustainability," he added. 

Professor Mustafizur Rahman, a distinguished fellow at CPD, recommended that companies make a business case out of it as a part of company valuation to make it more quantifiable.

The event was organised in partnership with the United Nations Development Programme (UNDP) Bangladesh and the United Nations Environment Programme Poverty-Environment Action.